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Saved by credit

by Kim Shiffman, Moneysense
Monday, June 16, 2008provided by

Your credit card could become your knight in shining armour if a shopping expedition goes wrong.

I discovered this last summer when I ordered $3,200 worth of living room furniture from a family-run retailer in Toronto. The furniture never arrived, and you can imagine my horror when I learned the store had gone bankrupt and the prospects for getting my money back were zilch.

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So, how did I end up with a full refund less than a month later? I used a little known credit card feature called chargeback.

Chargeback refunds your money if, say, you buy a laptop from an online retailer but what arrives is the wrong model. Or your car's brakes fail right after you spent hundreds of dollars having them fixed.

The chargeback feature is offered by all major credit cards and their associated banks, but before you use it, you have to try to resolve the issue with the merchant. If that fails, you must call the bank that issued your card within four months from the time the charge appears on your statement and ask for the chargeback or disputes department. After receiving the relevant information and receipts, the bank will launch an investigation. If the merchant disputes your claim, the bank will consider both sides and the decision whether to refund your money is at the bank's discretion. But, says Craig Penney of MasterCard Canada, "as long as the dispute is legitimate the chances of success are generally very high."

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